New England Biz Law Update
A Florida-based construction contractor is on the hook for more than half a million dollars after federal investigators found it shorted workers on overtime pay, largely due to how it rounded hours.
Improper time rounding
Amtex-NMS Inc., doing business as Southeast Modular Manufacturing, must pay more than $594,000 in back wages and damages to 419 employees, according to the U.S. Department of Labor (DOL).
A recent investigation by the agency’s wage and hour division concluded the employer violated the Fair Labor Standards Act (FLSA) by failing to pay time-and-a-half for hours worked over 40 in a week.
At the heart of the issue: improper time rounding practices. While rounding can be lawful when applied neutrally, Amtex-NMS’s system allegedly shaved time in a way that disproportionately favored the company.
The company was also cited for violating recordkeeping rules by failing to maintain accurate records of hours worked and wages paid.
Rounding rules are narrower than you think
Rounding is allowed under the FLSA – typically in 5-, 10-, or 15-minute increments – but only if, over time, the system is neutral and does not result in underpayment. Employers who always round down, or who fail to correct systematic undercounting, risk enforcement action and potential damages.
